Nick Clegg vows to get tough on fat cats
Nick Clegg threatened to introduce new laws to clamp down on executive pay yesterday, as he warned that the private sector must take its share of the pain in the "age of austerity".
The Deputy Prime Minister promised that the Government would "call time on excessive and irresponsible behaviour" on boardroom pay by setting out proposals next month.
"I believe that people should be well paid if they succeed," he said. "What I abhor is people who get paid bucket loads of cash in difficult times for failure."
Mr Clegg said recent figures showing that total executive pay in FTSE 100 firms increased by 49 per cent were "a real slap in the face for millions of people in this country who are struggling to make ends meet".
Although Mr Clegg said the Government would not limit private-sector wage levels, he pledged to legislate if necessary to ensure a new approach in the boardroom. He promised to break open the "closed shop" in which executives scratched each others' backs on remuneration committees, saying that employee representatives could sit on these committees. He also said that shareholders could be given more influence over pay and companies could be forced to publish figures on their top and median salaries.
His tough language on the BBC's Andrew Marr Show was seen as an attempt to portray a more even-handed approach after the Chancellor, George Osborne, was accused of singling out the public sector in the austerity measures he announced last week.
The squeeze on public sector pay will be extended for two years and plans are afoot to axe 710,000 state-funded jobs by 2017. "We need to make sure people in the public sector don't feel that they are doing all the heavy lifting; that people who are in a sense living by a completely different rule in the private sector are also held to account," Mr Clegg said.
"Just as we've been quite tough on unsustainable, unaffordable things in the public sector, we now need to get tough on irresponsible and unjustifiable behaviour of top remuneration of executives in the private sector."
His warning reflects Liberal Democrat fears that Mr Osborne might undermine his "we're all in it together" mantra if the Coalition is viewed as attacking the public sector.
Ed Miliband's campaign for a more "responsible capitalism" has also put pressure on the Coalition to crack down on executive pay.
Mr Clegg said the Government agreed with many proposals in last month's "extremely good" report from the independent High Pay Commission. Its transparency measures included forcing companies to publish the top 10 pay packages outside the boardroom and total pay of board members.
Vince Cable, the Liberal Democrat Business Secretary, will unveil the Government's plans in the new year. He wants radical change but could face opposition from Conservative cabinet members, including Mr Cameron. Although business leaders acknowledge the need for reform, Liberal Democrat ministers believe legislation will be needed to ensure it happens.
Mr Clegg sought to allay fears in his party that it has signed up to public-spending cuts lasting two years beyond the 2015 general election, as the Chancellor announced.
Mr Clegg said: "The Liberal Democrats will be entirely independent and we will be very keen to push our unique mix of economic credibility and fairness." He argued that all parties would have plans to make savings at the 2015 poll and suggested the Liberal Democrats would take a different line to the Conservatives by opposing the renewal of Britain's Trident nuclear weapons system and ending free bus passes and TV licences for "millionaire pensioners".
Senior ministers face a £4,000 hike in their pension contributions in an attempt to show they are sharing the pain with the rest of the public sector.